Red Hat proves that open source is good for business

Fourth-quarter figures put the Linux vendor on track to join the billion-dollar league next fiscal year.

Red Hat president and CEO, Jim Whitehurst

Red Hat president and CEO, Jim Whitehurst

Critics of free and open source software are fond of making the argument that software must be locked up, patented and jealously guarded if it is to serve as the basis for a successful business. Well, Red Hat just refuted such claims in a big way this week with its fourth quarter earnings report, which blew away analysts' expectations and placed the company well on track for billion-dollar revenues in the upcoming year.

Total revenue for Red Hat's fiscal fourth quarter ending Feb. 28 was $244.8 million, the company announced on Wednesday, representing an increase of 25 per cent from the same quarter a year ago. Subscription revenue for the quarter, meanwhile, was $209.3 million -- up 24 per cent year-over-year. For the full fiscal year, Red Hat's total revenue was $909.3 million -- representing an increase of 22 per cent over the prior year -- while subscription revenue was $773.4 million, up 21 per cent over last year.

"With record bookings and billings in the fourth quarter, we are on a run rate to become the first pure-play open source company to achieve a billion dollars in revenues next fiscal year, a milestone achievement for Red Hat and the open source community," said Jim Whitehurst, the company's president and CEO.

The Linux advantage

Strong demand experienced by the company recently was "largely driven by customers who are modernising their data centers and preparing their infrastructure for cloud computing," Whitehurst explained. "The comprehensive portfolio that Red Hat has developed with platform, virtualisation and middleware products provides enterprise customers with a foundation to deploy the next generation infrastructure."

As a result of this week's report, multiple investment management firms have raised their ratings of Red Hat from "neutral" to "outperform," the Wall Street Journal reported Thursday.

Based in North Carolina, Red Hat is the company behind both the Fedora and the Red Hat Enterprise Linux (RHEL) Linux distributions. Fedora is the free, community version of the software, while RHEL is sold as a commercial product with support and services.

Focus on the Cloud

Given that Red Hat has shown stellar results quarter after quarter -- even through the tough times we've seen recently -- I've been expecting for some time that it wouldn't be long before the company reached a billion in revenues per year. The company's increasing focus on cloud computing, of course, has only hastened that growth.

Still, amid a business climate that continues to be largely dominated by "Microsoft Trained Brain Syndrome," Red Hat's stellar success is a shining testament to the power of Linux. There's no more denying it -- open source software is officially and incontrovertibly good for business.

Follow Katherine Noyes on Twitter: @Noyesk .

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags open sourceLinuxoperating systemsunixsoftwareRed Hatnon-Windows

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Katherine Noyes

PC World (US online)
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?